Dump the lot of them. Dump the Republicans who voted against it and called their cowardice “conservative”—what, do they think there’s going to be a better option to come along?—dump the 95 Democrats in the House who followed them down the rat hole, and dump the House “leadership” of both parties who couldn’t get the job done. Along with them, kick the Senate “leadership” to the curb who couldn’t even get a vote off. These are the guys who created the problem, and they’re the ones who refused to fix it until it came to a crisis, and now they won’t put their careers on the line to fix it when it is a crisis? What do we need them for? What good are they?Update: OK, it appears I was too hard on the House GOP, though I still think they did wrong: it appears Nancy Pelosi was trying to set them up. For all her productive efforts to pull the deal together, she never lifted a finger to get her own party to vote for it. In fact, she did everything possible to make it painless for House Democrats to vote against it. Then, just before the vote, she gave a speech tearing into the GOP, angering and alienating all those Republican Representatives whose votes she’d been soliciting. Clearly, she wanted the bill either to fail—and to be branded a Republican failure—or to pass in such a way that it could be blamed on the GOP as a Republican bill. I’m still very unhappy with the House GOP—again, do they think this failure is likely to lead to a better outcome?—but given that a lot of them really didn’t believe in the bill, I can understand why so many voted against it, given the stunts Speaker Pelosi was pulling; and given her behavior, there’s no question in my mind that the blame for this one belongs squarely on her shoulders.At this point, I’m hoping that my pessimism is wrong and that Joseph Calhoun is right:

We are not on the verge of a new depression. The housing bubble collapse in California, Florida and a few other states is not enough to bring down the entire banking system. Investors who made mistakes in these markets should be held responsible and those who navigated the Fed-distorted market should be rewarded for their wisdom and prudence. Enacting the Paulson plan will not allow that to happen and our economy will suffer for it in the long run. The Japanese tried to prop up failed banks in the aftermath of the bursting of their twin bubbles and the result was 15 years of stagnation. Why are we emulating a strategy that is a demonstrable failure? A better alternative would be to allow capitalism to work as it should and stop the interventions of the Fed in the money market. Trust capitalism. It works.

He’s a minority voice in his opinion that the economy can get through this without a major infusion of capital; but he could still be right. Here’s hoping.

Here’s what the McCain campaign has to say about the current state of affairs:

To address our current financial crisis, John McCain suspended his campaign and returned to Washington, D.C., today to help build a bipartisan consensus for a proposal that would protect the American taxpayer.Despite today’s news reports, there never existed a “deal,” but merely a proposal offered by a small, select group of Members of Congress. As of right now, there exists only a series of principles, including greater oversight and measures to address CEO pay. However, these principles do not enjoy a consensus in Congress. At today’s cabinet meeting, John McCain did not attack any proposal or endorse any plan. John McCain simply urged that for any proposal to enjoy the confidence of the American people, stressing that all sides would have to cooperate and build a bipartisan consensus for a solution that protects taxpayers. However, the Democrats allowed Senator Obama to run their side of the meeting. That did not work as the meeting quickly devolved into a contentious shouting match that did not seek to craft a bipartisan solution. At this moment, the plan that has been put forth by the Administration does not enjoy the confidence of the American people as it will not protect that taxpayers and will sacrifice Main Street in favor of Wall Street. The bottom line is that as of tonight, there are not enough Republican or Democrat votes for the current plan. However, we are still optimistic that a bipartisan solution will be found. Republicans and Democrats want a deal that will protect the taxpayers. Tomorrow, John McCain will return to Capitol Hill where he will work with all sides to build a bipartisan solution that protects taxpayers and keeps Americans in their homes.

That’s certainly where the priorities ought to be: to protect responsible taxpayers and let the burden of the crisis fall on those who have been irresponsible (which means, among other things, shooting down Richard Durbin’s efforts to get the irresponsible off the hook at everyone else’s expense); unfortunately, the lobbying dollars are not with the taxpayer, they’re with the same folks whose irresponsibility and bad policies got us into this to begin with, so at the moment, I’m not real optimistic. Still, I think Megan McArdle’s right, we need to make the best deal we can make, even if we don’t think it’s a good one; if we don’t, here’s what we’re looking at (according to John Podhoretz, anyway):

If a deal isn’t reached by Sunday night, and a bill isn’t signed into law by Sunday night, it is likely we will wake up Monday morning to a market meltdown overseas of a sort the world has never seen—and then we will just wait, mute, until the American markets open. Monday will be an interesting test case: We will see just how much poorer the investing class can get in just one day. And then, a second day. And then, a week. As the whirlwind begins its reaping.

And by “the investing class” he doesn’t just mean the rich; he means all of us who need to save for the future, and have been doing so, and who could watch those savings blow away in the wind from Wall Street. Ladies and gentlemen of the Congress, you have 72 hours; if you get this wrong, they could be, to all intents and purposes, the last 72 hours of your political careers. Use them wisely.

The statement he offered today suggests so:

I am calling on the President to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself. It is time for both parties to come together to solve this problem. We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved. I am directing my campaign to work with the Obama campaign and the commission on presidential debates to delay Friday night’s debate until we have taken action to address this crisis. I am confident that before the markets open on Monday we can achieve consensus on legislation that will stabilize our financial markets, protect taxpayers and homeowners, and earn the confidence of the American people. All we must do to achieve this is temporarily set politics aside, and I am committed to doing so.

As Jennifer Rubin notes, this poses an interesting conundrum for the Obama campaign:

Will Obama follow suit and disrupt his debate prep? It will be hard to say no, yet odd to follow meekly behind McCain’s invitation.

More importantly, this offers perhaps the best hope we have for a solution that will actually get us through the current crisis—especially if Sen. Obama follows suit, but maybe even if he doesn’t.Update: Duane Patterson sums this up nicely.

I’d figured that the crisis around Fannie Mae and Freddie Mac would be a hanging curveball right in Sen. McCain’s wheelhouse, since (as I pointed out at some length a few days ago) he’s been warning us for years that this was coming; all he really had to do was stand up and say so. Instead, we’ve seen a pretty erratic week from him. I think John Podhoretz overstates things a little, but not much, when he writes,

Substantively, this has been the worst week of John McCain’s campaign—and I mean since its beginning, in early 2007. With a perfect argument to make on his own behalf—that he saw the problems with Fannie Mae and Freddie Mac and called them out in 2005 while others were still angling for their largesse, and that therefore he possesses the experience and demonstrated the kind of leadership and insight that are required for the presidency—he instead flailed about. Calling for the firing of Securities and Exchange Commission chairman Chris Cox? Right there, in that act, we got a glimpse of why senators so often make bad presidential candidates. From time immemorial, senators haughtily acts as though the dismissal of executive branch officials is a form of policymaking when it is almost always the opposite—an act of scapegoating.As SEC chairman, Cox only possesses the regulatory authority granted to him by acts of Congress, i.e., by senators like McCain. Cox did not and does not possess the regulatory authority to halt the creation of the poorly collateralized securities that nearly brought Wall Street down last week. But the naming and pursuit of villains was McCain’s gut instinct last week, as he seemed to attempt to don Teddy Roosevelt’s mantle as the crusader against “malefactors of great wealth.”

This sort of thing is the reason why so many of us on the conservative side have long had reservations about Sen. McCain; that shot at Chairman Cox was completely uncalled-for, unjustified, and counterproductive. (If he really is serious about the egregious Andrew Cuomo to replace him, that would be even worse.) I don’t think it’s really likely that he will “blow the debate and lose the election” as a consequence, even if he doesn’t snap out of grandstanding mode and “start talking like a serious-minded person with a sophisticated sense of the stakes” again, since I don’t think Barack Obama will be in a position to take any real advantage if he doesn’t; but he certainly won’t help himself any—and of greater importance, he won’t be doing the country any favors either.